William Dawbney Nordhaus (born May 31, 1941) is an American economist. He was a Sterling Professor of Economics at Yale University, best known for his work in economic modeling and climate change, and a co-recipient of the 2018 Nobel Memorial Prize in Economic Sciences. Nordhaus received the prize "for integrating climate change into long-run macroeconomic analysis".
Education and career Nordhaus was born in Albuquerque, New Mexico, the son of Virginia (Riggs) and Robert J. Nordhaus, who co-founded the Sandia Peak Tramway. Robert J. Nordhaus was from a German Jewish family – his father Max Nordhaus (1865–1936) had immigrated from Paderborn in 1883, and became a manager of The Charles Ilfeld Company branch in Albuquerque. Nordhaus graduated from Phillips Academy in Andover and subsequently received his BA and MA from Yale in 1963 and 1972, respectively, where he was a member of Skull and Bones. He also holds a Certificate from the Institut d'Etudes Politiques (1962) and a PhD from MIT (1967). He was a visiting fellow of Clare Hall, Cambridge in 1970–1971. He has been a member of the faculty at Yale since 1967, in both the Economics department and the School of the Environment. Nordhaus also served as its Provost from 1986 to 1988 and its vice president for finance and administration from 1992 to 1993. He has been on the Brookings Panel on Economic Activity since 1972. During the Carter administration, from 1977 to 1979, Nordhaus was a member of the Council of Economic Advisers. Nordhaus was elected to the American Philosophical Society in 2013. He served as the chairman of the board of directors of the Federal Reserve Bank of Boston between 2014 and 2015. Nordhaus lives in New Haven, Connecticut, with his wife, Barbara, a social worker recently retired from the Yale Child Study Center.
Contributions to economics and the study of climate change Nordhaus is the author or editor of over 20 books. One of his early works is the wildly popular introductory textbook, Economics, co-authored with Paul Samuelson. Originally a project of Samuelson's alone, Nordhaus worked on the textbook from the 12th edition until the 19th (the most recent edition), starting in 1985. The book was first published in 1948 and has appeared in nineteen different editions and seventeen different languages since then. It was a best-selling economics textbook for decades and is still extremely popular today. Economics has been called a "canonical textbook", and the development of mainstream economic thought has been traced by comparing the nineteen editions over the 1948–2010 period. Nordhaus has also written several books on global warming and climate change, one of his primary areas of research. Those books include, Managing the Global Commons: The Economics of Climate Change (1994), which won the 2006 award for "Publication of Enduring Quality" from the Association of Environmental and Resource Economists. Other notable books include, Warming the World: Economic Models of Global Warming (2000), co-authored with Joseph Boyer; The Climate Casino: Risk, Uncertainty, and Economics for a Warming World; and The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World (2021). In 1972, Nordhaus, along with fellow Yale economics professor James Tobin, published, "Is Growth Obsolete?", an article that introduced the Measure of Economic Welfare (MEW), or Index of Sustainable Economic Welfare (ISEW), as the first attempt to develop environmental accounting. Nordhaus is also known for his critique of current measures of national income. For example, in a 1996 article, he wrote,
If we are to obtain accurate estimates of the growth of real incomes over the last century, we must somehow construct price indexes that account for the vast changes in the quality and range of goods and services that we consume, that somehow compare the services of horse with automobile, of Pony Express with facsimile machine, of carbon paper with photocopier, of dark and lonely nights with nights spent watching television, and of brain surgery with magnetic resonance imaging. Economist Filip Palda summarizes the importance of Nordhaus's insight when he writes,
The practical lesson to be drawn from this fascinating study of lighting is that the way we measure the consumer price index is severely flawed. Instead of putting goods and their prices directly into the index we should reduce all goods to their constituent characteristics. Then we should evaluate how these goods can best be combined to minimize the cost of consuming these characteristics. Such an approach would allow us to include new goods in the consumer price index without worrying about whether the index of today is comparable to that of ten years ago when the good did not exist. Such an approach would also allow governments to more precisely calculate the rate at which welfare and other forms of aid should be increased. At present, such calculations tend to overestimate the cost of living because they do not take into account the manner in which increases in quality reduce the monetary cost of maintaining a certain standard of living.
Contributions on economics of climate change Nordhaus has written on the economics of climate change. He is the developer of the DICE and RICE models, integrated assessment models of the interplay between economics, energy use, and climate change. In Reflections on the Economics of Climate Change (1993), he writes,
Mankind is playing dice with the natural environment through a multitude of interventions–injecting into the atmosphere trace gases like the greenhouse gases or ozone-depleting chemicals, engineering massive land-use changes such as deforestation, depleting multitudes of species in their natural habitats even while creating transgenic ones in the laboratory, and accumulating sufficient nuclear weapons to destroy human civilizations. According to the climate change models Nordhaus has developed, sectors of the economy that depend heavily on unmanaged ecosystems–that is, are heavily dependent upon naturally occurring rainfall, runoff, or temperatures–will be most sensitive to climate change, generally. Agriculture, forestry, outdoor recreation, and coastal activities fall in this category. Nordhaus takes seriously the potentially catastrophic impacts of climate change. In 2007, Nordhaus, who has done several studies on the economics of global warming, criticized the Stern Review for its use of a low discount rate, writing,
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